NAPLES — Over the last several weeks, there has been a lot of coverage of how the governor’s budget proposal would affect our communities. The biggest debate so far is over the portion of the budget that ends municipal revenue sharing. As the author of a bill that takes the opposite course and would fully fund the revenue-sharing program, I wanted to weigh in on the discussion.

Revenue sharing is a several-decades-old program in which the state has returned a small but significant portion of sales and income tax revenue to Maine’s cities and towns. Communities use the money to pay for essential services like snowplowing.

It’s a sound policy that helps communities keep property taxes in check. Getting rid of it would lead to both cuts in services and higher property taxes – so you’d pay more and get less. Even if income taxes fell as part of the bigger plan, it seems like a pretty raw deal.

To be fair to the governor, his budget proposal does add some property tax relief for seniors and low-income workers. I agree with that part.

The proposal also seeks to offset the loss of revenue sharing by requiring that nonprofits with property worth over $500,000 pay some property taxes. At first glance, that seems reasonable because it broadens the tax base, but there are actually several problems below the surface.

Many towns – especially in rural parts of the state – don’t actually have nonprofits that would be subject to the new tax; according to Maine Municipal Association data, roughly 90 percent of towns would actually lose money if the proposal is approved. All five towns I represent would have to raise property taxes if the budget passes as is. That hurts even the seniors and low-income workers who’d get extra property tax relief.

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But even municipalities with taxable nonprofits may run into trouble. Several land trusts, summer camps, food banks and charities that would be on the tax rolls have small budgets and could end up laying people off or failing altogether. Given the kind of services many of these nonprofits provide and given the economic activity they generate locally, changing their tax status could do more harm than good.

Another problem with ending revenue sharing is that it’s an idea that assumes – falsely – that most cities and towns in Maine are poorly managed and have plenty of room to cut. Frankly, that’s nonsense. I served on the Naples select board for over a decade, and all of us on the board, regardless of our politics, shared a commitment to fiscal responsibility. Local officials across Maine have cut right to the bone, and sometimes right through the bone to keep property tax increases as small as possible.

The governor’s proposal is part of a long pattern in which the state has consistently tried to shift costs down to the local level – essentially balancing the budget on the backs of property taxpayers. When the state avoids responsibility for the money it spends, your property taxes go up.

The property tax doesn’t take into account how much money you make or how hard you work. It doesn’t take into account how old you are or whether you have kids to feed. It doesn’t take into account whether you’re on a fixed income or whether your home has sheltered multiple generations of your family.

But, aside from revenue sharing, the property tax is one of very few ways towns can fund schools, firefighting and other basic local functions.That’s what makes the tax so destructive.

According to the 2014 Compendium of State Fiscal Information, the tax burden of most Mainers breaks down like this: 41 percent is property tax, 22 percent is income tax, 17 percent sales taxes and 20 percent is a mix of other tax.

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Those numbers tell me the property tax is already by far the largest tax the average person pays. Rather than shifting costs to towns and cities, the state should find a way to pay for its budget at the state level. If it can’t do that, then it shouldn’t be spending the money.

I did not seek this office to let state government tax families and seniors out of their homes. I’ve been in touch with municipal officials across my district, and we’re going to make it clear that a new tax shift to property taxpayers is unacceptable.

I believe that passing my bill or incorporating it into the budget is the best way to give seniors and working families a fighting chance to get by, and I urge anyone who feels the same way to contact their state representatives and senators.

 


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